EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610464
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Bluescope Steel Limited applied for a TCO in respect of certain continuous paint line oven and afterburner ducts parts on 15 June 2006.
Instrument
TCO No 0610464 was made on 01 September 2006. It declares that those certain continuous paint line oven and afterburner ducts parts are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0610464 is taken to have come into force on 15 June 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted by the Parliament of Australia to regulate the import and export of goods into and out of the country. The Act includes provisions for the imposition of customs duties and other charges on imported goods, as well as measures to prevent the illegal importation of goods. The Tariff Concession Instrument No. 0610464, which was enacted in 2006, addresses the problem of ensuring that Australian businesses have access to necessary goods at a reasonable cost by providing tariff concessions on certain imported goods. The policy objective of this legislation is to support the competitiveness of Australian businesses by reducing the cost of imported goods that are not produced domestically. This is achieved by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders that provide for a lower rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0610464 under the Customs Act 1901 applies to goods specified in the instrument, specifically certain continuous paint line oven and afterburner ducts parts, which are declared to be subject to a reduced rate of customs duty. This instrument is applicable to entities that import these goods and seeks to benefit them by providing a tariff concession. The application of this instrument is national, aligning with the overarching framework established under the Customs Act 1901, which operates at the Commonwealth level. Any person or entity importing these particular goods can avail of the tariff concession if they comply with the conditions set forth in the instrument. The instrument does not apply to goods specified in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a Tariff Concession Order. The instrument came into effect on the date the application was lodged, 15 June 2006, and does not retroactively affect any rights or liabilities incurred prior to this date.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. The core criteria for approval, outlined in sections 269B and 269C, are that no substitutable goods must be produced in Australia in the ordinary course of business on the day the application is lodged. If the CEO is satisfied that these criteria are met, they must make a written order (TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per section 269P(3). This means that the goods specified in the TCO application will be subject to a lower rate of customs duty.
The obligations imposed by this Act on parties or entities it governs include ensuring that any application for a TCO is made in accordance with the provisions of sections 269F and 269C. The CEO must act on applications by determining whether they meet the core criteria and, if satisfied, issue a TCO. Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions on the proposed TCO within a reasonable period after accepting the application as valid. The Act also mandates that TCOs do not affect the rights of any person, other than the Commonwealth, as at the date of registration so as to disadvantage that person or impose liabilities on them in respect of anything done or omitted to be done before the date of registration.
Failure to comply with the provisions of the Customs Act 1901 or the regulations could result in civil or criminal consequences. Although the legislation does not explicitly state the penalties for non-compliance, breaches of customs regulations can generally lead to fines and other sanctions under the Customs Act 1901. For example, section 212 of the Customs Act imposes a penalty of up to 10,000 penalty units for serious breaches, which equates to a significant monetary fine given the current penalty unit value. Additionally, section 213 allows for prosecution for offences, which could lead to imprisonment depending on the severity of the offence.